When the Roman poet Virgil was commissioned to write a national epic poem by Augustus, it was an obvious - though astoundingly ambitious - idea to make the greatest works of antiquity, the Iliad and the Odyssey, his models.

The Aeneid, which Virgil left unfinished at his death in 19BC, took Aeneas, a bit-part player from the Iliad, and gave him a starring role. Aeneas's most striking moment in the Iliad involves his being magically whisked away to safety by his mother, the goddess Aphrodite, from a sticky moment on the battlefield - not a particularly edifying episode. Virgil, on the other hand, gave him a whole 12-book poem, detailing his thrilling journey across the Mediterranean from the ashes of Troy to his new home, and the bloody conflict that breaks loose in Italy, where he founds a colony. The poet pumped blood through the veins of Homer's minimal character, made him fall in love, gave him agonies of conscience, awed him with intimations of Rome's future greatness, made him fearful, joyful, bloodthirsty, religious, fatherly.

Ursula Le Guin has pulled off a similar trick with the Aeneid. She has taken a minor, even bloodless character from that poem, and breathed life into her. In Virgil, Lavinia is the daughter of Latinus, king of Laurentum in Italy. Latinus has received a prophecy instructing him that Lavinia must be married to a foreigner. The thoroughly foreign Aeneas turns up, but Lavinia's mother Amata, egged on by the angry goddess Juno, is determined that the girl be married to Turnus, a local suitor. War breaks out between the rival parties, ending only with the pitiless slaughter of the defeated Turnus by Aeneas.

Lavinia, as the cause of the war, is thus a Virgilian version of Homer's Helen. But instead of being imbued with Helen's self-confidence, or even with her uncanny beauty, Lavinia is a mere shadow. She never speaks. She has only a handful of appearances: once as the subject of a curious portent, when her hair bursts into flames during a religious ceremony; once as the subject of a peculiar and troubling simile, when her scarlet blush associates her with warfare and bloodshed. It is as if Virgil had room for only one love affair for Aeneas, when he falls for the immeasurably glamorous Dido.

In Le Guin's Lavinia, by contrast, the princess of Laurentum takes centre stage. The utterly convincing world that Le Guin creates, in her crisp, delicately flavoured, perfectly unfussed prose, is a homespun one. This is a simple agricultural society, dominated by the rhythms of the seasons. She has Lavinia tell us: "I've never ploughed, but I've watched our farmers at it all my life: the white ox trudging forward in the yoke, the man gripping with long wood handles that buck and rear as he tries to force the ploughshare through the soil that looks so meek and ready and is so tough, so shut." Le Guin does not marshal, as does Virgil, the gods as active characters; instead she gives her characters a rough, homely religion that honours the spirits of hearth and hill. It is a hideous shock when war strikes this gentle, pacific society.

Some may find Le Guin's world a little artificial: Lavinia has a certain self-awareness as a literary creation, a character who owes her existence to the imaginative inner life of Virgil, but also comes and goes in some realm outside his direct grasp. But, for this reader at least, Le Guin pulls it off, gently reminding us how all readers are creators, in their way, shading in and colour-washing the sometimes faint outlines proffered by poets.

Le Guin is certainly a marvellous reader of the Aeneid, and a generous one. Try as I might, I have never managed to square "pious Aeneas" - the dutiful, gods-fearing prince - with the rampaging berserker who buries his sword in his enemy's breast in anger, even when Turnus is downed, defeated and begging for mercy. Le Guin makes sense of him in her subtly moving, playful, tactfully told story, a novel that brought me to tears more than once. Lavinia is a delightful heroine: pragmatic, sensible, gentle, courageous. Virgil would never have written her: she is a modern projection of a modern intelligence and sensibility. But it is very much to Le Guin's credit that her Lavinia never strikes a false note.

• Charlotte Higgins's It's All Greek to Me is published by Short Books